With such a strong emphasis on biodiversity, getting planning permission to create a commercial forestry is becoming increasingly more difficult. At the same time, the demand for forestry remains strong — from the point of view of the need to produce timber and also from the point of view of the institutional investor.

For many companies, it’s a very attractive solution to the headache of decreasing their carbon emissions on paper. Furthermore, the crop of timber that the investment produces makes it a safe, if unspectacular, investment. And for most of these institutional investors (unlike smaller and/or individual investors), it’s the crop that counts – not the premia.

“We’d be marketing quite a bit of forestry within Munster and some counties outside Munster,” says John Hodnett of Clonakilty-based auctioneers Hodnett-Forde Property Services. “We don’t put them all up on the website. We sold quite a big one recently, for example, three months ago. Some of them go up on the website but we’d often be instructed to sell a large forestry holding and from our experience over the past 8-10 years, we’d have a client or clients whose specific requirements match it, so the deal is done without needing to be publicly advertised.”

 It's also worth noting that our damp cool climate is perfect for forestry growth, with a faster turnaround time from planting to harvesting than you’ll get in mainland Europe.

“It’s not a new business but it’s a business that’s growing slowly,” says John. “There’s good activity in the sector at the moment, particularly in semi-mature forestry but the quality has to be good and the species selection is a factor.

“There are a number of pension funds in the market very active and purchasing in the market over the last few years. The demand is good but the product has to be right.”

 In the cases of many of the earlier plantations, he says, the species selection would have been questionable. The only species of interest for these large-scale investors is the fast-growing Sitka Spruce, with broadleaf species of no interest to investors. These buyers are interested in plantations that are over 20 years old and which are more than 25 acres in size.

“Good-quality Sitka Spruce plantations are making anything from €4,500 to €8,500 per acre,” says John. “The different funds have different criteria and naturally, before they will make any move, they will carry out their own due diligence with their own expert personnel.”

 Up to about 4-5 years ago, there was only one major buyer in the market — namely Gresham House in London. They went into partnership with Coillte to form the Irish Strategic Forestry Fund. This fund aims to increase timber production in Ireland and increase forestry coverage of the country from the current level of 11.6% to 18%.

“Since the merger of Gresham and Coillte, that has put stronger demand in the marketplace for good quality plantations,” says John. “And it has put a strong floor on forestry land prices in Ireland.” 

 Tralee-based Éamonn McQuinn of McQuinn Consulting currently has an 88-acre forestry plantation on the books at Ardcannaght, Castlemaine. There is already good interest but no formal offers at the time of writing.

“It was planted over 20 years ago,” he says. “It’s mainly Sitka Spruce and a small amount of Ash and Alder. It’s in two parts in close proximity and the access is very good… there aren’t many around Kerry at the moment. It’s ready for harvest and very suitable for institutions.”

 In the Midlands, Pádraic Murtagh of James L Murtagh & Associates in Mullingar also saw some good interest in the forestry sector from a variety of areas:

“There are different people buying forestry at the moment,” says Pádraic. “There are environmental investment funds, people buying for corporate social responsibility, people who are into milling. It’s selling better than it was three or four years ago.”